JV Scores $334M Recap for Logistics Center in Bronx

A partnership between Innovo Property Group and Affinius Capital has secured a $334M financial package to recapitalize a 1M SF warehouse in the Bronx that opened last year and is occupied by Amazon as an anchor tenant.

Bank OZK provided a $250M senior mortgage on the new logistics center at 2505 Bruckner Boulevard, with PIMCO adding an $84M mezzanine loan. Cushman & Wakefield arranged the transaction.

OZK, based in Little Rock, AR (the OZK is short for Ozarks), also was the primary lender on a $305M construction loan for the project in 2020, along with EverWest Real Estate Investors.

“This recapitalization is a milestone achievement in this project’s life cycle, especially in this economic climate,” Andrew Chung, founder and CEO of Innovo, said in a statement.

The site of the new logistics center is the former home of the Whitestone Cinema, a longtime movie palace at the base of the Bronx-Whitestone Bridge. Innovo and Affinius acquired the 20-acre site in 2017 from Extell Development.

Amazon leased 568,500 SF at the new two-story facility, which features 28- to 32-foot high ceilings, 106 loading doors and 664 interior parking spaces.

“With over half of the building already leased, we believe the Class A industrial market in New York City is positioned to perform well in 2023,” said Charles Ochman, senior managing director of Affinius, in a statement.

Several other large warehouse projects are getting ready for delivery in the Bronx.

Nearing completion on 14 acres in an Opportunity Zone in the Hunts Point neighborhood is the Bronx Logistics Center, a 1.3 million square foot multistory warehouse. The $381M project is a joint venture of Turnbridge Equities and Dune Real Estate Partners.

The Bronx Logistics Center is about a mile from one of the nation’s largest food markets, the Hunts Point Food Distribution Center, where more than 155 wholesalers sell $3 billion worth of meat, fish and produce annually.

Multistory warehouses can cost up to 40 percent more to build than single-story facilities with comparable space. The foundation and structural system of a multistory facility must be engineered to bear the additional weight of trucks picking up loads from industrial space on multiple floors, each with high ceilings and loading docks.

For example, a recently completed three-story 397,000 square foot warehouse built by DH Property Holdings and Goldman Sachs Asset Management in the Red Hook section of Brooklyn is configured with first and second floors that each offer 28-foot ceiling clearance and 14 loading docks, and a third floor with 18-foot-high ceilings. An elevated truck court allows full-sized trailers to access the second floor via a truck ramp, while the third floor is accessed by a freight elevator.

Experts estimate that industrial rates need to be as high as $30 per square foot to justify the investment in multistory facilities.